Saudi, UAE to lead in renewables

Dubai, December 17, 2012

Saudi Arabia and the UAE are expected to lead Middle East and North Africa region’s generation of renewable energy, according to a report.

The UAE and Saudi Arabia are the new entrants from the Mena to Ernst & Young’s Renewable Energy Country Attractiveness Indices (CAI), which covers 40 countries across the globe on the attractiveness of their renewable energy markets, energy infrastructure and the suitability for individual technologies.

As new entrants to the index, they exemplify the growing clean energy potential of the Mena region, with policy-makers in the two countries already announcing ambitious renewable energy targets, it said.

Energy consumption in the Middle East has grown rapidly in the last five years. Between 2007 and 2011, the region‘s energy consumption grew 22 per cent. In the next five years, energy usage is not expected to slowdown, with double–digit growth rates forecast for the Middle East.

Nimer AbuAli, Mena head of Cleantech, Ernst & Young said: “Emerging markets, endowed with resources and high levels of government support, are already learning from their predecessors‘ experiences, with many opting for capacity tenders in favor of financial incentives. Increasing energy demand in these regions has strengthened government investment in clean energy. Saudi Arabia and the UAE are supported by strong government initiatives, a proven track record in energy infrastructure, and robust financial markets.”

The UAE presents strong evidence of its commitment to delivering its renewable energy and carbon reduction targets. Abu Dhabi launched its Masdar Sustainable City initiative, which will house 50,000 people and will be completely reliant on renewable sources for its power needs, paving the way for carbon–free cities in the region.

Dubai has also launched the Mohammed bin Rashid Al Maktoum Solar Park, with a view to establishing 10MW of installed capacity by 2013, and eventually 1GW by 2030.

Sir Baniyas Island wind project, with a capacity to produce 30MW, is also expected to be completed in 2013. Plans for a 100MW wind farm near the Saudi border are being considered by Masdar.

The UAE is also recognized for its commitment to the global carbon agenda and has planned to reduce its CO2 emissions by 30 per cent by 2030. Both Abu Dhabi and Dubai are targeting the generation of 7 per cent and 5 per cent respectively of total power demand from renewable sources by 2030.

Nimer said: “In an approach that is fundamentally different from many other Mena countries, the UAE tends to shape its markets not just through independent regulation, but also through the creation of privately structured, government backed entities such as Taqa, Center of Waste Management and Masdar. These are able to channel government funds into infrastructure projects through effective partnering with the private sector at a global level, to deliver projects and transactions.”

Large potential

Unlike many other GCC countries, Saudi Arabia has good wind energy potential, with some 4.9 hours of full–load wind per day on average, one of the highest in the Mena region. The strikingly high solar radiation of around 2,550kWh/m2/year and the availability of large stretches of empty desert that can host solar arrays, in addition to the vast deposits of clear sand that can be used in the manufacture of silicon PV cells, makes Saudi Arabia an ideal location for both CSP and PV power generation.

Saudi Arabia has quickly made it onto the list of focus markets for investors and technology providers, with the government announcing its ambitious $109 billion plan to install 41GW of solar and 9 GW of wind capacity by 2032. Other strong signals to the market include the King Abdullah City for Atomic and Renewable Energy (KA–Care), the government‘s alternative energy arm, announcing its plans to launch a major renewable energy auction.

Nimer said: “Saudi Arabia hopes that in addition to using renewable energy to help meet rising electricity demand, it will also reduce its domestic use of crude oil and hence release additional oil capacity for exports.”

Outlook

“The outlook for the UAE is very positive. The country’s renewables push is supported by government commitment to address the country’s growing energy needs in a sustainable manner. Saudi Arabia’s consistency in the development of power projects bodes well for clean energy expansion in the country, especially since the Saudi government has long demonstrated a substantial commitment to social and economic infrastructure, as well as its desire to free up hydrocarbon fuels for export. The next months will be particularly crucial for the future of the country‘s clean energy sector,” concluded Nimer. – TradeArabia News Service